Friday, March 26, 2010

real property - specific performance - agreement to agree - essential terms

Trowbridge v. McCaigue - Superior Court - March 26, 2010

In the instant case, the trial court found that the signed Purchase Offer (hereinafter “Agreement”), was an “agreement to agree” and that “no express contract ever existed between” Appellant and Appellees. The court’s decision was based on that part of the Agreement that states that if the Appellees accept this offer, then the parties would “enter into a sales agreement.”

“The Statute of Frauds instructs that a purported transfer of an ownership interest in real property is not enforceable unless evidenced in writing and signed by the party(ies) granting the interest.” Long v. Brown, 582 A.2d 359, 361 (Pa. Super. 1990) (citing 33 P.S. § 1). “A writing required by the Statute of Frauds need only include an adequate description of the property, a recital of the consideration and the signature of the party to be charged.” Hessenthaler v. Farzin, 564 A.2d 990, 994 (Pa. Super. 1989).

The essential terms required to satisfy the Statute of Frauds are present in the Agreement signed by Appellant and Appellees. While the trial court acknowledges this, it concluded that the Agreement was nonetheless not a contract because it indicated “an intention of the parties to come to an agreement at a later time.” In so holding the court relied on Highland Sewer and Water Authority v. Forest Hills Mun. Authority, 797 A.2d 385 (Pa. Cmwlth. 2002), wherein the court stated, “An agreement to agree is incapable of enforcement, especially when it is stipulated that the proposed compact shall be mutually agreeable.” Id. at 390 (quotation marks omitted). However, in Highland, the court specifically held that the trial court did not err in concluding that no express contract arose from the parties’ conduct because they had “indicated an intention to agree upon essential terms in the future.” Id. (emphasis added).

In contrast, the Agreement here does not indicate an intention to agree upon any essential terms in the future. In fact, contrary to the trial court’s assertion, the Agreement does not imply that there was anything left to agree upon in the future. Rather, the only future occurrence contemplated by the Agreement is the execution of a sales agreement. “An agreement to make and execute a certain written agreement, the terms of which are mutually understood and agreed on, is in all respects as valid and obligatory as the written contract itself would be if executed.” Mastroni-Mucker v. Allstate Ins. Co., 976 A.2d 510, 523 (Pa. Super. 2009). Field v. Golden Triangle Broadcasting, Inc., 305 A.2d 689, 693 (Pa. 1973); GMH Associates v. Prudential Realty Group, 752 A.2d 889 (Pa. Super. 2000); Wang v. Whitetail Mountain Resort, 933 A.2d 110, 112-13 (Pa. Super. 2007).